Premium Essay

Investment in Associate

In: Business and Management

Submitted By bluemaja
Words 741
Pages 3
Intercorporate share investment * the purchase of the equity securities of one entity by another entity * case of one entity investing in another entity through the acquisition of share capital
Significant influence * power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies
* power to govern the financial and operating policies of an entity so as to obtain benefits from its activities
* an entity, including an unincorporated entity such as a partnership, over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture
* an entity including an unincorporated entity such as a partnership that is controlled by another entity known as the parent

If the investor holds, directly or indirectly through subsidiaries, 20% or more of the voting power of the investee – presumed that the investor has significant influence, unless it can be clearly demonstrated that this is not the case.

If less than 20% - does not have SI

Substantial or majority ownership by another investor * does not necessarily preclude an investor from having SI
Manifestations of SI a. Representation in the BOD b. Participation in policy making process c. Material transactions between the investor and investee d. Interchange of managerial personnel e. Provision of essential technical information

Potential voting rights * Considered in assessing whether an entity has SI * BUT the investor’s share in the P/L of the investee and of changes in investee’s equity is determined on the basis of “present ownership interest” and does not reflect the possible exercise or conversion of potential voting rights

Loss of SI * When an…...

Similar Documents

Premium Essay

Investment Associates

...productivity and save time while doing it. Risk management, especially with today’s legal conditions, a company should take all precautions to ensure that they stay pro-active in managing their liability exposure and stay in compliance with federal regulations. The HRIS Metrics can certainly provide a rich source of reasons why such a system should be implemented in the organization, it makes it easier for all stakeholders to understand why it’s needed and it highlights all the benefits it can provide. The next step is so show how much it can cost the company and to do that, a Cost-Benefit Analysis is performed. In preparing a Cost-Benefit Analysis for the project, discuss some of the costs and benefits involved in this investment in HRIS. While preparing an HRIS CBA, the HRM should discuss sources of value for benefits and costs in investing in the system with the decision makers. In this particular case study, with an HRIS; it indicated that it would save both time and increase productivity. For example, the HR manager would spend a week searching through employee files to complete the Equal Employment Opportunity Report mandated by federal law (Kavanagh & Thite, 2009). By integrating an HRIS, the HR department will be able to save time and increase their production because the time consumed performing manual labor will be eliminated. The new HRIS will be able to track compensation and benefits thus decreasing the amount of work the HR representatives......

Words: 1102 - Pages: 5

Premium Essay

Ias 28: Accounting for Associates

...| IAS 28: Accounting for Associates | | Larry Richardson 6/16/2014 | Corporations tend to invest in other entities for various reasons but the main reason is to increase their own profits. When corporations purchase stock in other corporations there has to be a way to account for this transaction and to do this IAS 28 was introduced as Exposure Draft E28, Accounting for Investments in Associates and Joint Ventures, in July, 1986. The history of IAS 28 is as follows in the table below which shows the last amendment being in 2011 with an effective date of January 1, 2013. History of IAS 28 (as amended in 2011) July 1986 | Exposure Draft E28 Accounting for Investments in Associates and Joint Ventures | April 1989 | IAS 28 Accounting for Investments in Associates | 1 January 1990 | Effective date of IAS 28 (1989) | 1994 | IAS 28 was reformatted | December 1998 | IAS 28 was amended by IAS 39 Financial Instruments: Recognition and Measurement effective 1 January 2001 | 18 December 2003 | Revised version of IAS 28 issued by the IASB | 1 January 2005 | Effective date of IAS 28 (2003) | 10 January 2008 | Some significant revisions of IAS 28 as a result of the Business Combinations Phase II Project relating to loss of significant influence | 22 May 2008 | IAS 28 amended for Annual Improvements to IFRSs 2007 about impairment testing | 1 January 2009 | Effective date of May 2008 amendments to IAS 28 | 1 July 2009 | Effective date of January 2008......

Words: 3919 - Pages: 16

Premium Essay


...controls another sets out the accounting requirements for the preparation of consolidated financial statements. CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements are defined in Appendix A of IFRS 10 as follows: The financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. Consider figure 23.1. Australia Ltd has investments in a number of other companies. A shareholder’s wealth in Australia Ltd is dependent not only on how well Australia Ltd performs, but also on the performance of the other entities in which Australia Ltd has an investment. Rather than require a shareholder in Australia Ltd to analyse each of the companies in the economic group, if Australia Ltd prepared a set of financial statements by adding together the financial statements of all entities in the group, this would assist an investor in Australia Ltd to analyse his/her investment. Consolidated financial statements perform this function as they are a consolidation, or an adding together, of the financial statements of all entities within an economic entity. As stated in paragraph B86 of IFRS 10, consolidated financial statements ‘combine like items of assets, liabilities, equity, income, expenses and cash flows’ of the entities in the group. This process of adding the financial statements together can be seen in its simplest form in figure......

Words: 32518 - Pages: 131

Free Essay

Est1 Task 1

...result in disciplinary or regulatory sanctions against an associate, as well as fines or responsibility for consequential losses resulting from the violation. References to "associate" or "associates" in this manual include general principals and financial advisors unless otherwise specified. Such references also include individuals working both in the home office and in a branch office. Please do not keep the printed manual as a reference as it will eventually be out-of-date. Commissions and Sales Background FINRA Rule 2121 requires prices and commissions charged to the client be fair and reasonable. Policy The firm and vendors with whom it has dealer agreements has either set commission amounts or a range of commissions that may be acceptably charged to a client. Individuals may not make any arrangements with clients outside the parameters set by the firm in its commission policy. The Field Supervision department may review commissions charged on a transaction as part of the normal supervisory review process to determine if the commissions charged were fair and reasonable based on all relevant factors. These include but are not limited to: Reason for the transaction or repositioning How commissions charged matched intended and actual holding periods Various other factors Field Supervision may complete adjustments designed to keep the commissions charged fair and reasonable where: Long-term investments (bonds, mutual funds, annuities, etc.) are repositioned......

Words: 4057 - Pages: 17

Premium Essay


...875,927,694 331,414,695 37.84 Available-for-sale-investment 840,687,402 816,893,531 23,793,871 2.91 Receivables-Net 113,434,183 158,278,935 (44,844,752) -28.33 financial Assets at fair value through profit or loss - - - - Held-to-maturity investments - - - - real estate held for sale 129,216,942 - 129,216,942 100.00 Other Current Assets 134,567,441 89,025,301 45,542,140 51.16 Total Current Assets 2,425,248,357 1,860,002,690 565,245,667 30.39 Non Current Assets Deferred Tax Assets 11,357,319 5,625,420 5,731,899 101.89 Due from related party - 65,000,000 (65,000,000) -100.00 Available-for-sale in investment - - - - investment in subsidiaries, Associate and joint venture-net - - - - Equity Investments - 88,941,889 (88,941,889) -100.00 Investment property-Net 363,733,216 153,675,589 210,057,627 136.69 Property and Equipment-Net 720,820,379 534,117,133 186,703,246 34.96 investment in an associate 7,105,379 - 7,105,379 100.00 Held-to-Maturity investments 32,071,040 30,468,630 ......

Words: 7573 - Pages: 31

Free Essay

Corporate Accounting

...Separate Statements of Comprehensive Income Exhibit 5(a) Consolidated SOFP Exhibit 5(b) Separate SOFP Exhibit 6 Consolidated SOCIE Exhibit 7 Separate SOCIE Exhibit 8 Consolidated and Separate SOCF Exhibit 9 Disclosure about Reporting Date Exhibit 10 Acquisition Method of Business Combinations Exhibit 11 Comparisons of Investment in Subsidiaries of 2 years Exhibit 12 Goodwill as Intangible Assets and Computations Exhibit 13(a) Goodwill Recognized on Acquisition Date Exhibit 14 Goodwill shown in Intangible Assets Exhibit 15 Investment in A Joint Venture Exhibit 16 Equity Method of Joint Venture Exhibit 17 Adjustments to CSOFP for MFRS 11 Adoption Exhibit 18 Adjustments to CSOCIE & CSOCF for MFRS 11 Adoption Exhibit 19 Adjustments to SOFP, and SOCF for MFRS 11 Adoption Exhibit 20 Summary of Financial Information Investment in A Joint Venture Exhibit 21 Separate Calculation for Investment in Associates Exhibit 22 Recognition of Dividend Income Exhibit 23 Dividend Income From Subsidiaries and Associate Exhibit 24 Investment in An Associate Exhibit 24 Summary of Financial Information Investment in An Associate 1.0 Introduction The objectives of this assignment is to allow students to have a closer and thorough look in the accounting standards set out by the IASB and to gain knowledge on the requirement by the standards on how the companies should disclose the relevant information in their financial report in a proper manners......

Words: 5700 - Pages: 23

Premium Essay

Ab Job Titles

...Client Group Associate Rotational Program Job Description Our Client Group Associate Rotational Program will hire graduating seniors to work in our New York City office. Each Associate will participate in four six-month rotations over a two-year period. The Program will expose the Associate to the lifecycle of an investment product from the initial generation of the idea to researching interest in the market place to crafting our marketing strategy and ultimately, distributing our products and servicing our Institutional and Retail clients. This includes, but is not limited to, the following: • • • • Researching the market to substantiate or identify attractive opportunities for new and existing products. Establishing the business strategy and rationale for new products as well as designing and implementing new products. Conceiving product marketing campaigns and creating refreshing message content. Generating comprehensive product proposals (aka requests for proposal or RFPs) to capitalize on new business opportunities and responding to due diligence requests from existing clients and consultants. Servicing Institutional and Retail clients by acting as a liaison with various departments to maintain client relationships, fulfill various requests and conduct competitive analysis to drive business development efforts. • Each rotation will require you to learn a new or expand an existing skill set and knowledge base, and/or complete a project that is critical to the......

Words: 710 - Pages: 3

Free Essay

Tough Guy

...What is noticed at the beginning of the case is Jeremy Frazer, the associate at the investment bank, Hudson and three other members working on the deal, Jean Fenster, Rich Patten and Payton Edwards, have been keeping their experiences of working with Chip Mazey to themselves. The case reveals that they finally confided in each other about how it was like to work with Chip Mazey. Associates and Analyst at Hudson were experiencing something far more than just a competitive and stressful work environment. Jeremy Frazer along with some of his other colleagues directly under Chip Mazey’s leadership was experiencing a broken culture and disruptive work life. The present culture at Hudson proves to be one of hostility between the employees and VP, Chip Mazey. Mazey has been with Hudson for 10 years, the case reveals that he followed his demeaning and derogatory or “kiss up, kick down” style of working. How is Mazey’s work style affecting the culture of the associates and analyst at Hudson? Mazey’s work style introduces us to our first presenting issues. Mazey attitude affects his work style and the work life of many employees at Hudson. The company provides a 360-degree feedback system, which presented Mazey as having a nasty reputation amongst the analyst and associates at Hudson. Analyst and associates at Hudson are clearly not happy and have not been for the past ten years. Mazey was considered a solid banker at Hudson that gave him the reputation through the......

Words: 1860 - Pages: 8

Premium Essay


...reclassified to profit or loss [S9.18].Any remaining interest, whether a financial asset or becomes an associate or a JV, is measured at the carrying amount at the date control is lost i.e. no remesaurement to fair value [S9.19]Full attribution of profit or loss and OCI to NCI even if it results in a deficit to NCI [S9.22]. | MFRS 10A new control model based on the elements of power to direct the relevant activities to extract returns and the link between power and returns.Exemption for presenting CFS given to partially-owned subsidiaries provided NCIs have been informed and do not object.The control model captures de facto control (dominant shareholder concept) and structured entities.On disposal of a subsidiary, all related OCI reserves must be recycled to profit or loss or transferred to retained earnings in accordance the applicable MFRSs.Any remaining interest must be remeasured to fair value.All decreases in stake without loss of control are treated as equity transactions.Full attribution of profit or loss and OCI, even of it results in a deficit to NCI. | Separate Financial Statements & Combined Financial Statements MPERS | MRS | Section 9Does not require presentation of separate financial statements for the parent entity or for the individual subsidiaries [S9.24].An investor with joint ventures or associates prepares financial statements using equity method for those investments. These statements are not separate financial statements. The investor may elect......

Words: 2525 - Pages: 11

Premium Essay


...conditioner manufacturing 7 6. Investing is REE's new core competency 8 II. OUTLOOK 10 III. SWOT analysis 19 IV. FINANCIALS 21 1. Good cash flow from office leasing and dividends 21 2. Profits from investments drive earnings growth 22 3. 2013 results review 24 4. 2014 forecasts 26 5. Restatement of 1Q13 earnings depresses yoy performance for 1Q14 28 6. Recent developments among investee companies 29 7. Volatile net margins 29 V. VALUATION AND RECOMMENDATION 29 VI. REFERENCE: 32 I. The company REE has been research for the critically and analyze about the finance of the firm, risk or evaluate on investment recommendation also of this firm. II. INTRODUCTION: REE was founded in 1977 as an M&E (mechanical and engineering) contractor for building projects. The company was privatized in 1993 and began manufacturing its "Reetech" brand of air conditioners in 1999. In 2000, REE became one of the first two companies to list on the Ho Chi Minh City Stock Exchange, and is still usually among the top 10 most liquid stocks in Vietnam. In 2001, REE branched into property investment and construction with its grade B "Saigon E-town", office building project. The cash flows from this project and its core businesses funded a series of savvy investments in additional grade B offices, bank shares, and more recently in utility and infrastructure companies. 1. Management and ownership REE’ss CEO-cum-chairwoman Ms. Thanh and her family own 10% of the......

Words: 10256 - Pages: 42

Premium Essay


...Introduction Jaiprakash Associates is a diversified infrastructure conglomerate based in Noida, India with business interests in Engineering & Construction, Cement, Power, Expressways, Real Estate, Hospitality, Sports, Education (not-for-profit) Information Technology, Fertilizer & Healthcare. As of March 2013, the group had a net worth of Rs. 13,092 crore. DLF Ltd is the largest commercial real estate developer in India and is based in New Delhi. DLF's primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. As of March 2013, the group had a net worth of Rs 27,528 crore. Objectives The primary objective of this project is to make the financial comparison of two major companies, i.e., DLF Ltd and Jaiprakash Associates. The analysis of each company’s performance, profit and loss statement, balance sheet and financial statement ratios are prepared for the period 2009 to 2013. Financial Ratio Analysis 1. Liquidity Ratio Current Ratio Except for the year 2010, DLF has maintained its current ratio at around 2.This figure is better in comparison to Jaiprakash Associates which maintained its current ratio close to 1.3. This implies that DLF Ltd. has more current assets to cover its current liabilities. Average Collection Period Jaiprakash Associates ability to collect customers’ payments on accounts receivable is stronger than DLF Ltd, with Jaiprakash Associates......

Words: 2084 - Pages: 9

Premium Essay


...Saudi Investment Bank (SAIB) 11/9/14, 7:18 PM Home About SACM Education Academic Supervision Academic Accreditation E-Services Emergency ‫ﻋ#ﺑﻲ‬ Job Vacancies for PhD Holders At Jazan University Retail Personal Banking Training Programme – SAIB “Pioneers” Raytheon isGO seeking an Saudi Investment Bank (SAIB) Layalina Productions, Inc. Organization: Saudi Investment Bank (SAIB) Jazan University Saudi Investment Bank (SAIB) Raytheon Company Regional Economic Models, Inc. International Alliance Associate, LLC - Private Equity Virtual Internship International Alliance Associate, LLC IT/Computer Science Internship International Alliance Associate, LLC - Marketing Associate Internship International Alliance Associate, LLC - Research Analyst Internship Saudi Investment Bank (SAIB) Al Kharj Armed Forces Hospitals Derayah Financial CENM-King Abudulaziz City of Science and Technology Alcatel-Lucent Schlumberger Sector: Finance Website: Retail Personal Banking Training Programme – SAIB “Pioneers” The “Pioneers” Programme has been specifically designed for entry level graduates with MIS, Marketing, Business Administration, Engineering or relevant Financial, Accounting or Banking related Bachelor or Master's Degree qualifications to acquaint them with the functioning of the retail operations of banks and to equip them with information that is essential at the onset of their banking careers within the Personal Banking Group of......

Words: 532 - Pages: 3

Premium Essay

Vault Im

...CAREER GUIDE TO INVESTMENT MANAGEMENT ANDREW SCHLOSSBERG WITH ALEXANDER GORELIK AND THE STAFF OF VAULT © 2002 Vault Inc. Vault Career Guide to Investment Management Table of Contents INTRODUCTION 1 History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 The Industry Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 THE SCOOP Buy-side vs. Sell-side 3 11 Jobs on the Buy-side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Jobs on the Sell-side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Recommended Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 The Clients of Asset Managers 21 Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Institutional Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 High Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Investment Styles 33 Type of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Risk Characteristics of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Portfolio Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Summary of Investment Styles .......

Words: 2394 - Pages: 10

Premium Essay

Special Topic in Accounting

...session, students should be able: 1) To define and differentiate significant influence, joint control and control. 2) To determine whether the investor can exert significant influence over an investee. 3) To determine when it is appropriate to use equity method in accounting for investments. 4) To understand the underlying principle of equity method. Reference: IAS 28: Investments in Associate and Joint Ventures I. Accounting for equity instruments from the point of view of the investor: A. Based on management’s intention for acquiring the investment. 1. Passive investment a. Fair value through profit or loss b. Available for sale investments: 2. Active investment Level of influence on investee’s management |Level of control |Definition |Type of entity | |Control |Power to govern |Subsidiary | |Joint control | |Joint venture | | | |Joint operation | |Significant influence |Power to participate |Associate | II. Existence of significant influence. Can the investor exert significant influence over the investee’s operating and financing decisions? IAS 28.3 Significant influence is the power to participate in the financial and operating policy......

Words: 4451 - Pages: 18

Premium Essay


...Harvard Business School 9-899-062 Rev. December 7, 1998 Walnut Venture Associates (A): RBS Group Investment Memorandum Ralph Wagner pulled his file on the RBS Group, a young company that developed and sold accounting software specifically targeted to software companies. Wagner was a private investor—an “angel”—and a member of an informal group of other investors known as Walnut Venture Associates. (See Exhibit 1 for background information on Walnut) RBS was seeking to raise $2 million in equity capital to fund its growth. Wagner had agreed to take the lead role in evaluating RBS as an investment opportunity for Walnut. While Wagner would spearhead the process, each individual would make his own decision about whether to invest in the company. It was December 26, 1997 and Bob O’Connor, RBS’s founder and CEO, had presented to the Walnut group one week ago. The group had been impressed with O’Connor, with RBS’s business focus, and with the fact that the company had a product, sales and even earnings. Based on this positive first impression, the group had decided to take the next step and begin a more in-depth investigation of the company and its prospects. Half a dozen or so “Walnuters” had indicated an interest in possibly investing, and it was up to Wagner to come up with a due diligence agenda for these individuals. He pulled out RBS’s plan (See Exhibit 2) and began to sort through the issues the group should investigate during this phase, as well as an...

Words: 11914 - Pages: 48